Enabling ease of doing business in Nigeria requires collaborative efforts – Oduwole
Jumoke Oduwole, Special Adviser to the President on Ease of Doing Business and the pioneer Executive Secretary of the Presidential Enabling Business Environment Council (PEBEC), chaired by the Vice President, where policies aimed at supporting small and medium-sized enterprises are facilitated, in this interview with BusinessDay’s team led by Bashir Hassan, discusses the reforms being implemented by the Council to make states business-friendly, and improve Nigeria’s rating on global Ease of Doing Business rankings.
What’s your opinion on where this country was in 2015, and where are we today in terms of ease of doing business?
In 2015, at the time that we started the intervention, there were two things that can point you to the answer on where Nigeria was; the international ranking of the World Bank on Ease of doing Business, we were at 170, that’s an empirical ranking. Secondly, the private sector trust deficit, the feedback on how the private sector spoke about business, and about government. There was no coordination like I mentioned.
There was not enough inter-ministry, inter-departmental coordination; so we couldn’t move concertedly. Everybody was trying to do their own thing and without talking enough with the private sector who are the beneficiaries of the reforms. That was the scenario we met on the ground.
We started analysing. This is very empirical work. You have to break it down, use a lot of data, Nigerian data which you have to gather yourself and engage with stakeholders. You also use international data on what other countries are doing in terms of starting a business. We decided to adopt the World Bank’s model, and we added some other things.
The World Bank’s model runs from companies starting a business all the way to insolvency, although it has been stopped now. There are about 10 areas; from the legal ones like insolvency, minority protection, to land registration and paying of taxes. Ease of doing businesses is soft infrastructure; so you’re looking at processes, and how the government relates with the private sector when it comes to these things.
Nation building is not just a government burden. We each have a role to play. Each person has a responsibility
One of the first things we did in 2017 was to have an executive order, the first one of this administration, trying to address transparency and efficiency of public service delivery as antidotes to bureaucracy and corruption. We focused on the following: Customs, Immigration, Corporate Affairs Commission (CAC), National Agency for Food and Drug Administration and Control (NAFDAC) and Standards Organization of Nigeria (SON), which interface daily with the public. We had reforms based on the feedback from the public. We conducted surveys, a lot of focus group sessions, interviews, research, and then looked at global best practices.
Then we saw that we can’t stay at the federal level alone because every business is domiciled in a state, so we (PEBEC) entered into collaboration with the National Economic Council (NEC).
What are the respective roles of the federal and state governments in improving ease of doing business?
When you map out the empiricals of it, with reference to our constitution, you will see that there are some roles that are at the federal level and there are some roles that are for the states; and there are some roles that are concurrent.
Take, for instance, land use — you know that is for states. If you take corporate tax, that’s for federal. But when we take something like starting a business, there are some state functions. States sometimes give business permits.
In each given year, we have the national action plans which are accelerators that we will work on for 60 days; but we have an annual cycle each year. So by October/November, we would have discussed with MDAs on the reforms we want to work on for the year; the costs, the time and the speed. And then we’re working on people, processes and infrastructure to a lesser extent.
So you have to map it out. For instance, if you want to work on starting a business, you’ll work with the Corporate Affairs Commission (CAC); you may also work with FIRS because you may want businesses to get their TIN. You may want to partner with the Central Bank so that there is a link between the collateral registry, and business registration portal. We use a lot of technology for automation and digitization, because that’s another shortcut to transparency.
What achievements are you proud of, since your work in this office?
We have moved up 39 places in the World Bank’s Doing Business ranking. We were recognised twice among the top ten reformers in world reform in a three-year period. In those three years, we passed an unprecedented amount of legislation through the National Assembly, including the Collateral Registry Bill 2017 and the Credit Bureau bill, both of which facilitates access to credit for MSMEs. Both bills have now become a law following presidential assent.
The PEBEC Secretariat team worked with the Corporate Affairs Commission (CAC), the anchor agency, on the re-enactment of the Companies and Allied Matters Act (CAMA), which was assented to by President Muhammadu Buhari in August 2020.
The Decree was passed in 1990 and was cutting edge at the time, however, the leading corporate legislation in Nigeria was repealed and re-enacted for the first time in 30 years despite attempts by different stakeholders for nearly a decade before we got involved.
We have also been working on the Business Facilitation Bill that recently got passed by the National Assembly and has been transmitted to the President for his assent since 2018. The PEBEC Secretariat team collaborated with various private sector stakeholders, including 40 law firms, consulting firms, etc., public sector stakeholders, including SEC, Nigerian Exchange Group, etc. on this Bill.
We have worked very closely with the Judiciary in the establishment of the first small claims court in Lagos in 2018, which, by the end of 2022, handled over 4000 cases since its inception. Similar courts have been established in Kano and five other states, the latest being Nasarawa, Jigawa, Ekiti, Ogun, and Edo states.
We released our first Indigenous ease of doing business report in 2021, which saw Gombe in the first position, followed closely by Jigawa. It captured the enabling environment as perceived by the private sector. We would be releasing the second reiteration immediately after the election.
The PEBEC models have been replicated across most states. Most states have active Ease of Doing Business Councils chaired by the governor (Nasarawa) or the deputy governor (Kaduna) or Secretary to the Government, the commissioner of finance or a high ranking government official. In each state, a reform champion works with a PEBEC template and models.
We have been working with states since 2017, and last year went really well. We collaborated with the World Bank on a $750 million three-year facility that has been approved by the Federal Executive Council (FEC) to start this January. So each state will meet some ease of doing business requirements and get a soft loan, after they have done the work on a performance for results basis.
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Why Gombe when you have Kano, Lagos and other more visible states?
To be honest, the explanation is two-fold: the counter-intuitive part, which is systemic, is that countries, cities, states with less complexity tend to have the opportunity to do better if they take the opportunity. So, on a global level, you’ll see Singapore and New Zealand topping the charts. You have never seen the US topping the charts on ease of doing business. In Africa, you will see countries like Mauritius and Rwanda topping the list.
So, coming to Nigeria, we were not surprised everybody asked us why Gombe. It’s not just in doing business that they are doing well. If you ask any one on public health, Gombe’s name will come up again; so it has to do with leadership and hard work.
You can be small economically and do very badly. The state that is at the bottom is Zamfara. So it’s not only about the size of the economy. But if you’re small and you use the opportunities to make an enabling environment for your private sector, you will do well. A C of O can be obtained in Gombe in under a week.
What do you tell Nigerians to be proud of when they travel out or when they have any opportunity to speak to anybody who wants to invest in Nigeria? What do you tell them to tell potential investors that are unique and competitive?
We don’t say this enough but, Nigeria as a country has so much going for us. The population of 200 million should not be seen as something negative but actually a huge blessing. Our geographical location is good. We have a coastal line and are placed geographically as a trading nation.
We have an abundance of natural resources in the ground. We have a huge amount of arable land. We have a huge size of over 900,000 square kilometres. We have dynamic young people in our tech, creative and agricultural/agribusiness sectors. Indeed, we have very entrepreneurial people.
Nation building is not just a government burden. We each have a role to play. We have to see the glass as half full and work in a coordinated manner, knowing that there’s no point pointing at somebody else to deliver the Nigeria of our dreams. Each person has a responsibility. Who are the people who built Japan? Who built the US? Who built Europe? It is the Japanese, Americans and the Europeans!